Retirement Account Changes

This morning President Trump announced a plan, by executive order, to change certain rules regarding taking funds from retirement funds and making it easier for small businesses to offer 401K plans for their employees. The old rule is that at 70.5 years old you were required to withdrawal a certain amount of money out of one’s retirement plan called an RMD (Required Minimum Distribution). The order from the president calls for a review of that requirement looking into allowing an individual to leave the money in their plan longer.

Also, the order directs the Treasury and Labor departments to consider issuing regulations that could make it easier and cheaper for smaller employers to band together to offer 401K type of plans.

These are both good ideas. Retirees are working and living longer so the age of 70.5 may no longer be appropriate as the time to start the RMD and why wouldn’t the government want to help small business and their employees?